Category: Taxes

Alex Wild is the Reasearch Director at The TaxPayers' Alliance. This article was originally published in City A.M. on August 30, 2016

Most governments would love to get their hands on an extra €13bn (£11.1bn) from a multinational company. But the Irish government will likely be wrangling in court for many years at what will surely be considerable expense in a somewhat unusual bid to avoid collecting tax. The European Commission has ordered what is by far the largest recovery order in EU history by deciding that Ireland gave Apple tax benefits illegal under EU state aid rules. Essentially, it has concluded that two rulings by the Irish tax authorities, in 1991 and 2007, endorsed an allocation of profits within two of Apple’s Irish subsidiaries that had “no factual or economic justification”. The Commission believes these advantages were not available to all companies in Ireland.

With only a few weeks left until Congress once again goes on hiatus, there is quite a laundry list of items members must tackle before September 30th. However, there is one item in the pipeline that may seem like “inside baseball” to the average taxpayer but should become a top priority for lawmakers this month, as it could have serious consequences for the U.S. economy and taxpayers Late last week, InsideSources highlighted the unintended consequences of the Treasury Department’s new proposed rules aimed at industrial corporations as part of an aggressive effort by the Obama Administration to fight international tax avoidance. While the new rules have been a point of contention for quite some time, the article published by the investigative news source actually introduces the argument that this rule could not only hurt American business, but “end up benefiting large banks on Wall Street and elsewhere in the world.”

This month, the Council on Foreign Relations released a new report calculating the impacts of removing three standard business tax deductions from America’s oil and gas industry – or as they claim instituting “tax reform.” However, careful review of the study shows that many of the arguments are seriously flawed, especially when it comes to the characterization of these tax provisions and their actual impacts on America’s secure energy future. Here are the three facts behind some of the claims made by CFR.

Growth of government continues to be a problem not just at the federal level but also in many states around the country. Some of the worst growth in government is usually paid for through excise taxes on products like soda, tobacco, and alcohol. These taxes are harmful to the middle class because they never raise the projected revenue. And, in the case of tobacco taxes, illicit activity increases when taxes are high. Proposition 56 (Prop 56), a $2 per pack cigarette tax increase in California, will be on the ballot and could be a fiscal and legal nightmare for the state. Proponents of Prop 56 claim the new tax will help public safety and raise revenues. In reality however, it is nothing more than a $1.4 billion tax increase meant to fund more government bureaucracy and provide a bailout to specific industries while subverting existing law in the state and neglecting the real problems that Californians face.

Excise taxes are among the most harmful taxes imposed on lower and middle- income people. And, unfortunately, state and local governments have a strong penchant for implementing these burdensome taxes. In addition to disproportionately affecting people, they also harm small businesses, and rarely (if ever) generate the projected revenue that many of the proponents say they will. Knowing all of these concerns, these taxes still frequently pass in cities all across the country, including Philadelphia, Pa. where a new soda tax was passed. The new Sweetened Beverage Tax, will impose a 1.5 cents-per-ounce tax on more than 1,000 beverages and will go into effect on January 1, 2017. The Taxpayers Protection Alliance (TPA) strongly opposed the tax as it was being debated. TPA was part of a broad coalition that urged the city council not to adopt Mayor Kenny’s new tax. In fact, the coalition (led by Capitol Allies) sent a letter to the city council before the vote laying out all the problems that the tax would place on families all across the city of Philadelphia.

Today, the Treasury Department and the Internal Revenue Service (IRS) will hold a public hearing where multiple stakeholders will give their input on Treasury’s recently proposed rules and their potential impact. For those unfamiliar, Treasury announced early this spring that, in an effort to combat corporate inversions, it would propose that under Section 385 of the Internal Revenue Code, related intercompany debt could re-defined as equity, changing the tax consequences of the transaction. Business groups along with members of Congress from both sides of the aisle have warned Treasury about the broad reach of the rules, which will sweep up even companies with no intention to move abroad. The groups and Congress also warned about the consequences of increased business costs and that the new rules would be an obstacle to job and economic growth.

Yesterday, the Taxpayers Protection Alliance (TPA) held a briefing on Capitol Hill on comprehensive tax reform titled “Independence Day 2.0: Freedom from our outdated tax code.” There was a lot of interest in the event which is not surprising because tax reform is one of the largest policy discussions happening today. While everyone has a different opinion on how it should be accomplished, there is one thing that nearly all of us can agree on and that is that comprehensive tax reform is long overdue. The event began with opening remarks from TPA President David Williams and a short clip of TPA’s 2016 Tax Day Man on the Street video (you can see the full version here). The video showed attendees and members of Congress that working Americans are frustrated and Congress to fix the broken tax code. Two distinguished members of Congress, House Ways and Means Committee Chairman Kevin Brady (R-Texas) and Republican Study Committee Chairman Rep. Bill Flores (R-Texas), spoke at the briefing. Chairman Brady laid out specific details of the tax reform blueprint that he released just a few weeks ago. Chairman Brady stressed the key components of the blueprint including simplifying the code, reducing the corporate tax rate, reforming the IRS, and repealing the death tax. Rep. Flores (R-Texas) discussed the need for comprehensive tax reform and introduced one of the panelists, Rebecca Boenigk.

For the last 30 years, the American people have had to endure a tax system that is overly complicated and stifles the growth and opportunity for workers, business owners, and entrepreneurs. If the United States plans on continuing to be the predominant global economic power, the tax code needs a complete overhaul with new ideas that simplify the entire process and lowers rates across the board so we can unburden taxpayers and allow citizens to live the American Dream. Simply put, we need comprehensive tax reform and we need it as soon as possible.

Comprehensive tax reform is long overdue. In fact, the last time there was comprehensive tax reform (1986) Ferris Bueller's Day Off was the number one movie in the United States. Tax reform is not only long overdue, but it is also an important component to jump starting the economy. A terrible jobs report, rising costs, stagnant wages for working families, and a Congress that seems to be paralyzed with inaction much of the year give credence to the message that elected officials need to come together and fix the broken tax code. There is a plan to fix to tax code. House Speaker Paul Ryan (R-Wisc.) and House Ways and Means Committee Chairman Kevin Brady (R-Texas) unveiled a tax reform blueprint (click here) that will serve as the platform for a meaningful conversation on tax reform. The goal is to get the ideas for how tax reform can be done in Congress on the table, and keep the discussions going this year. And then, in 2017, lawmakers can put a real, bipartisan plan together that the House and Senate can send to the White House. Some of the important components of the tax reform blueprint include: a fairer and simpler code for individuals and small businesses, lowering the corporate tax rate, and repealing the Death Tax.

Today in Philadelphia, lawmakers will take a crucial vote on an important issue for taxpayers and consumers. The Taxpayers Protection Alliance has always been a staunch opponent of regressive and excessive taxation, and espeically when it comes to targeted tax increases that will harm the middle class. The plan from Mayor Jim Kenney would impose a 3 cents-per-ounce tax on more than 1,000 beverages. The plan is bad idea for taxpayers, consumers, and local businesses and TPA opposes the proposal and urges the city council to reject such a harmful tax increase on Philly resiodents. Yesterday, led by Capitol Allies, a broad coalition of taxpayer and free market groups (including TPA) sent this coalition letter to the Philadelphia City Council asking them to vote no. TPA will keep a close eye on this imoportant vote, hoping that local elected officials do the right thing for taxpayers.

Last week, I testified before the House Small Business Committee at its hearing, “The Sharing Economy: A Taxing Experience for New Entrepreneurs.” The discussion focused on how labor laws and tax policy should evolve to better reflect the American workforce of today. As executive director of ACT | The App Association, I represent the interests of more than 5,000 app makers and connected device companies across the country. Our members leverage the connectivity of smart devices to create innovative solutions that make people’s lives better. Some of our members are part of the growing sharing economy, which is characterized by peer-to-peer exchanges of goods both digital and physical.

The court battle over the Environmental Protection Agency’s “breathtaking expansion” of its powers with the Clean Power Plan also means a renewed spotlight on the Obama administration’s tax and environmental policies and the chilling effect they will have on American jobs and growth. The CPP, the administration’s “signature” climate change policy that regulates power plant carbon emissions, has been challenged by West Virginia and dozens of other states. Although she subsequently disavowed her own statement, Secretary of State Hillary Clinton best articulated the aim of that policy when she said, “We’re going to put a lot of coal miners and coal companies out of business.” Forced to comment on the Clinton assessment, EPA chief Gina McCarthy declined to repudiate it, asserting awkwardly, “It’s certainly not good for anybody to be out of work in an economy. … I do not agree that anyone in the United States of America should go without a job.” It’s a statement marinated in irony, considering McCarthy and the Obama administration advocate continuously for tax and environmental policies that will crush American energy industry jobs, inflate the already swollen ranks of the unemployed, and raise energy costs for the entire nation.

Now that Tax Day 2016 is over, taxpayers can relax for at list a little while. However, before you know it, tax season will creep up once again and everyone will be looking to make sure they are checking all the right boxes when they file their tax returns. Tax complexity has been a major issue and it has cost taxpayers time and a great deal of money, as evidenced by a recent study from the National Taxpayers Union. One current program, the Free File program, has been able to save taxpayers time and money through a public-private partnership that makes filing taxes a great deal less stressful for tens of millions of Americans. As Senator Elizabeth Warren attempts to hand tax-filing services entirely to the Internal Revenue Service (what a great idea that would be), the Taxpayers Protection Alliance (TPA) joined Americans for Tax Reform on a coalition letter urging Congress to make the Free File program permanent.

Whew! Another Tax Day has come and gone. Even though Americans had three extra days to finish their taxes, that added time didn’t do much to alleviate the stress of filling out taxes. Even when you are expected to get money back from the government, it seems like the entire process is a continuous series of hurdles that people are being forced to jump over in order to get their own money back. And, as this tax day gets further behind us, the need for tax reform continues to grow and people from all walks of life and political persuasions agree that tax reform is critical.

(Washington) – Today, the Taxpayers Protection Alliance (TPA) was proud to be a part of a new legal challenge to South Dakota’s Internet sales tax law, SB 106, signed into law on March 22, 2016 by Governor Dennis Daugaard (D). The Amicus Brief, filed this morning by NetChoice and the American Catalog Mailers Association (ACMA), asserts that Internet sales tax mandate in SB 106 forcing out-of-state sellers to collect South Dakota sales tax is, “an unconstitutional expansion of state tax powers and directly conflicts with precedent set by the Supreme Court of the United States.”

Now that tax day is over, another very important day is on the horizon: World Intellectual Property (IP) Day on April 26. World IP Day is observed each year and marks the importance of IP and the benefits it has on the free market as well as to taxpayers, consumers, and businesses. As IP continues to be a critical issue on a number of fronts, including trade and the economy, it cannot be ignored that the abuses of IP protections are harmful to economies and taxpayers not just in the United States but also all over the world. Free market groups from around the world are taking notice of the importance of IP. The Taxpayers Protection Alliance (TPA) joined with the Property Rights Alliance and more than 80 other organizations representing more than 50 countries signing this coalition letter sent to the Director General of the World Intellectual Property Organization (WIPO), Dr. Francis Gurry. The letter lays out the case for protecting intellectual property rights and not just here in the United States, but around the entire world. Two areas where the economic impact can be seen directly are digital piracy and plain packaging.

Today is Tax Day 2016! The Taxpayers Protection Alliance (TPA) hit the streets and talked to folks from around the country about what they thought about taxes. The last time there was comprehensive tax reform was 1986. A lot has changed since 1986, why hasn't the tax code? Many of the Presidential candidates have said that tax reform will be a priority if they are elected, but Congress has the ability to act now. This is a bipartisan issue, where both Republicans and Democrats agree that our outdated and cumbersome tax code needs to be reformed now. Taxpayers are sick of being in a time warp where yet another tax day comes and goes and nothing has changed. We need tax reform done in 2016.

Man on the Street Style Videos Ask People About Taxes and Their Preferred Policies

(Washington, D.C.)—On Monday, April 11th, the Taxpayers Protection Alliance (TPA) launched a Tax Day 2016 campaign aimed at Capitol Hill and members of Congress in order to keep comprehensive tax reform a priority for policymakers. The campaign, “Tax Day 2016: Watch Your Assets,” will run from April 11 through tax day and feature man on the street style videos, share graphics and targeted emails to members of Congress and Hill staff. The last time there was comprehensive tax reform was 1986. A lot has changed since 1986, why hasn't the tax code? “Many of the Presidential candidates have said that tax reform will be a priority if they are elected,” said David Williams, President of the Taxpayers Protection Alliance. “But Congress has the ability to act now. This is a bipartisan issue, where both Republicans and Democrats agree that our outdated and cumbersome tax code needs to be reformed now. Taxpayers are sick of being in a time warp where yet another tax day comes and goes and nothing has changed. We need tax reform done in 2016.”

Miriam Roff is the State Affairs Coordinator at Americans for Tax Reform, this piece orginally appeared on ATR.org

The purported “popularity” of a particular piece of public policy should not be the end-all justification for its passage. Such is certainly the case with efforts to raise taxes on tobacco products. Many state lawmakers have labeled these tax hikes as a win-win for taxpayers and the government because they have bought into the fallacy, perpetuated by organizations like the American Cancer Society Cancer Action Network, that the state revenue impact and affect on consumer behavior justify the targeting of low-income taxpayers with regressive tax hikes. These proponents are wrong. Oklahomans are the latest victims in the targeted campaign to address a state overspending problem with a cigarette tax hike. And academics have been called in to help make the case for big government legislators. A Northeastern University professor of economics released a misguided report earlier this month bolstering Gov. Mary Fallin’s (R- Okla.) proposed $1.50-per-pack cigarette tax hike. Although the report insists that cigarette tax revenue increases with each hike and remains relatively stagnant in the following years, it fails to address and expand upon all of the consequences that come with tobacco tax increases.

The 2016 Presidential contest is in full swing as the party primaries enter the final stages before the summer conventions. The Taxpayers Protection Alliance (TPA) believes that all candidates should be talking about comprehensive tax reform, reducing spending, reforming the Pentagon, and fixing the broken process on how spending is authorized in Washington. The lack of regular order has led to billions in earmarks (which are technically illegal), and continuous stopgap measures to fund the government. Unfortunately, much of this discussion is missing real substance. One candidate in particular, Hillary Clinton, has been taking a harsh tone on the private sector, going so far as to single out specific companies purely for political points. Former First Lady, New York Senator, Secretary of State, and current Democrat frontrunner for her party’s nomination Hillary Clinton has been increasingly using her campaign to level dishonest attacks on the business community. The tactics from Sec. Clinton show a clear unnerving by her campaign, which continues to fend off the insurgent campaign of Vermont’s Socialist Senator Bernie Sanders. Her campaign is struggling not just because her lack of energy, her attacks on the private sector are full of hypocrisy and dishonesty. The specific issue here is the current talks between Johnson Controls, Inc. and TYCO as they move towards a merger that could be beneficial to consumers, employees, and shareholders of the two companies. Sec. Clinton asserts that the merger is nothing more than greedy corporate America hurting the middle class.